FRANKFURT -- Volkswagen Group ousted CEO Herbert Diess and Porsche boss Oliver Blume will take over in the role, VW said on Friday, in a surprise shake-up atop the world's second-biggest automaker.
Diess is resigning "by mutual agreement," VW said. But a supervisory board vote forced Diess to step down following a series of missteps over strategy, delays in key product programs because of software, and communication style.
Sources with knowledge of the matter said the Porsche and Piëch families, who own over half the voting rights and a 31.4 percent equity stake in Volkswagen, also pressed for a change at the top.
Diess' abrupt ouster followed slow progress developing core software, overseen by a new unit, Cariad, that will be the cornerstone of the company’s next wave of electric vehicles. The Cariad software group, directly managed by Diess, has faced ongoing troubles ranging from management and staff infighting, and key operating features that were routinely behind schedule.
The software delays have prompted VW Group to postpone the sales launch of key Audi and Porsche models, raising questions, notably among the Porsche and Piëch families, about Diess’s ability to meet strategic targets, The Wall Street Journal reported, citing people close to the matter.
"Diess was incorrigible. He significantly changed Volkswagen - for the better. But his communication was miserable," one source said, asking not to be named.
VW’s board is betting Blume will be a more collaborative and stable leader, according to people familiar with the matter, who asked not to be identified discussing private deliberations.
Blume, who will continue his role as the head of the Porsche brand, will be flanked by VW’s current Chief Financial Officer, Arno Antlitz, who will assume the position of chief operating officer.
The changes are effective Sept. 1, VW said.
Blume will be the company’s fourth CEO since 2015.
“The timing is unfortunate and another illustration of dysfunction at VW,” Jefferies analyst Philippe Houchois wrote in a report. “We have been here before, with new management or a crisis bringing hopes of change.”
Blume's appointment heralds a change in management style at the German auto giant that is expected to replace the erratic and unpredictable attitude of his predecessor with a more team-based culture.